Posts Tagged ‘Maize’
The Labour Bureau of the Government of India has done us a most valuable service by disaggregating from the consumer price indices, separate indices for the individual items that a household typically buys, whether every day, periodically (weekly or monthly) and even annual purchases.
I have charted here the data for the cereal and cereal substitutes. This group consists of rice, wheat, maida (flour), suji (coarse wheat flour), bread, sewai (rice vermicelli), maize atta, wheat atta, tapioca, jowar, sago, ragi, bajra, maize, sattu (ground cereals) and the grouping of beaten or flattened rice (chira, muri, khoi, lawa (CMKL)).
The chart describes the movement – over 96 months from 2006 January to 2013 December – of the price indices (not the prices) for these foods. These are calculated as all-India prices using the consumer price index for industrial workers (CPI-IW) and the base is 2001 = 100.
There are several significant findings from examining the movement of this group of price indices. (1) Over 2008, 2009 and 2010 the rise was steadily upward with a pronounced spike in some items that lasted from 2009 August to 2010 May. This is noteworthy as no spike is visible (for the group as a whole) during 2007-08 when there was a worldwide steep rise in the prices of foods.
(2) From around 2010 May, maida, maize atta, CMKL, bread, wheat atta, rice, wheat increased at a muted rate and even remained flat over short periods whereas other cereals and cereal substitutes rose steeply and/or showed volatility in their indices. (3) From 2012 June the price indices of all items in this group rose steadily and steeply – more steeply than at any time since 2006 January and have continued this accelerated pace until the end of the recorded period, 2013 December.
This is another excellent release into the public domain of valuable indicators by the Labour Bureau which help describe the relentless rise in the prices of food staples in India. As the Labour Bureau has shown, whether it is the consumer price indices it maintains or whether it is the individual goods and services necessary to maintain an acceptable minimum standard of living for the households engaged in agriculture, manufacture or which are dependent on self-employment, the so-called ‘India growth story’ that the ruling government and its supporters speak triumphantly about in fact imposes burdens on the working classes that have grown heavier every month.
Support for the team of scientists led by Giles-Eric Séralini, a professor of molecular biology at Caen University (France), is growing quickly every day following the appalling (but unsurprising) turfing out of the famous Seralini study from the journal Food and Chemical Toxicology.
The industrial combines that work with governments, multilateral lending agencies, corrupt politicians, venal bankers and (to add to this merry list) scrupleless publishers have been hard at work in the last week. Through their public relations peons, they have swamped the world’s newspapers and television channels with reports claiming that the ‘retraction’ by the Elsevier journal, Food and Chemical Toxicology, of the Seralini study is a step forward for science and a step closer to helping end hunger.
This is the most virulently cynical twisting of the truth in a long and gory history of truth being twisted in order that the food and cultivation options of millions remain, not a choice of options but the diktat of the corporations (GM seed, poison pesticide, poison fertiliser).
What did the Seralini group find? Their toxicological study on GM maize and Roundup herbicide involving 200 rats was done over two years, and found an alarming increase in early death, large tumours including cancers, and diseases of the liver and kidney. The study, published in 2012 by this journal (which has condemned Elsevier to lasting infamy and driven a spike through the cankerous heart of the sponsored scientific journals ancillary industry) was not the first to show the effects of Monsanto’s packaged poison (farmers in every country know the truth), nor was it the only one to show adverse health impacts from GM feed or Roundup herbicide.
This immediately set off the mobilisation amongst the hundreds, then thousands, who had been following the course of the Seralini study and the repugnant reactions to it by the GM food and seed industry (Monsanto, Bayer, Dow, DuPont, Syngenta, BASF and their subsidiaries and national partners).
In an open letter to the editor of Food and Chemical Toxicology the European Network of Scientists for Social and Environmental Responsibility (ENSSER) bluntly said that the journal’s retraction of the Seralini team’s paper “is a travesty of science and looks like a bow to industry”. ENSSER reminded the worldwide audience that the Séralini group had found severe toxic effects (including liver congestions and necrosis and kidney nephropathies), increased tumor rates and higher mortality in rats fed Monsanto’s genetically modified NK603 maize and/or the associated herbicide Roundup. There it was, clear as day.
ENSSER went on: “Even more worrying than the lack of good grounds for the retraction is the fact that the journal’s editor-in-chief has not revealed who the reviewers were who helped him to come to the conclusion that the paper should be retracted; nor has he revealed the criteria and methodology of their reevaluation, which overruled the earlier conclusion of the original peer-review which supported publication. In a case like this, where many of those who denounced the study have long-standing, well-documented links to the GM industry and, therefore, a clear interest in having the results of the study discredited, such lack of transparency about how this potential decision was reached is inexcusable, unscientific and unacceptable. It raises the suspicion that the retraction is a favour to the interested industry, notably Monsanto.”
The Elsevier journal, coming under baleful condemnation from all quarters for its cowardly act, essayed a response meant to be collective but which mired itself in administrative cover-thy-bum murkiness and addressed none of the substantial matters raised by the open letters which are gaining supported every day. Unable to see the writing on the crumbing frankenfood wall, The Economist, that gormless right-wing leaflet despised by fish’n’chips vendors, stumbled in with an editorial titled ‘Fields of beaten gold: Greens say climate-change deniers are unscientific and dangerous. So are greens who oppose GM crops’.
With the retraction of the Seralini team paper by the Elsevier journal, the Economist’s leader gibbered feverishly, “There is now no serious scientific evidence that GM crops do any harm to the health of human beings. There is plenty of evidence, though, that they benefit the health of the planet. One of the biggest challenges facing mankind is to feed the 9 billion-10 billion people who will be alive and (hopefully) richer in 2050. This will require doubling food production on roughly the same area of land, using less water and fewer chemicals. It will also mean making food crops more resistant to the droughts and floods that seem likely if climate change is a bad as scientists fear.” As you can see, this specious and laughably binary argument is the kind that the CGIAR and its thought-control institutions (such as the International Food Policy Research Institute) have sloshed through governments in the South for the last decade, mostly successfully.
But the world’s scientists cannot be bought and cannot be bullied en masse. The Institute of Science in Society wrote and circulated an open letter on the retraction and also included in it a “Pledge to Boycott Elsevier” – this letter has now been signed by 454 scientists and 813 non-scientists from 56 different countries!
The ISIS letter to the feckless Elsevier journal has said, very firmly: “Your decision to retract the paper is in clear violation of the international ethical norms as laid down by the Committee on Publication Ethics (COPE), of which FCT is a member. According to COPE, the only grounds for retraction are (1) clear evidence that the findings are unreliable due to misconduct or honest error, (2) plagiarism or redundant publication, or (3) unethical research. You have already acknowledged that the paper of Séralini et al (2012) contains none of those faults.”
Moreover, the ISIS open letter has addressed in one fiery sweep the GM food and seed industry and their craven partners in governments, the journal publishers and their smarmy influence brokers alike: “This arbitrary, groundless retraction of a published, thoroughly peer-reviewed paper is without precedent in the history of scientific publishing, and raises grave concerns over the integrity and impartiality of science.”
Elsevier is already notorious for having published six fake journals sponsored by unnamed pharmaceutical companies made to look like peer reviewed medical journals; this particular journal, Food and Chemical Toxicology, had recently appointed ex-Monsanto employee Richard Goodman to the newly created post of associate editor for biotechnology; Elsevier remains the target of a still-current boycott initiated by eminent mathematician, Sir Tim Gowers, as a protest by academics against the business practices of Elsevier, especially the high prices it charges for journals and books; and this now thoroughly invalidated journal had also retracted another study finding potentially harmful effects from GMOs.
The International Grains Council’s monthly Grain Market Report for 2013 October finds its grains and oilseeds index down 16% from the same period a year ago because, as the IGC has said, “the supply outlook for grains, rice and oilseeds markets is significantly more comfortable than last year”.
The IGC has raised the output forecast for total grains (wheat and coarse grains) in 2013-14 by 10 million tons this month, to 1,940 mt, up 8% from the same period last year. Demand is also expected to rise, but by a slower 5% compared to the same period a year ago. The IGC has said that “inventories are seen recovering by 39 mt to a four-year high at the end of 2013-14”.
The global trade forecast is raised by 3 mt, to 273 mt, which will exceed the previous record in 2010-11. Hence the question ought to be: if the international trade in grain collects, moves and processes just under 15% of the world’s total grain, why do prices in our local wholesale and retail food markets get influenced so much by what the IGC’s monthly report describes? This is not an answer you can expect given to you with honesty and concern from your local administration, much less from the food retail and industrial agriculture representatives.
For the major grains, here are the IGC summaries. Wheat output is expected to rise by 6% in 2013-14 from the level of a year ago and closing stocks are seen up by 7 mt, at 182mt, although this would still be below the level seen in 2011-12. The 2013-14 forecast for the global maize harvest has been raised by 5 mt this month to a record 948mt, and stocks are seen recovering to a 13-year high of 152 mt.
Rice is considered by the IGC to be “mixed, with good export demand and weather-related crop worries underpinning values in Vietnam, but Thailand’s prices fell further on limited buying interest and pressure from heavy intervention reserves”. Rice output for 2013-14 is forecast up 1% from a year ago, with world ending stocks expected to rise for a ninth consecutive year. (The IGC’s report for 2013 October is available here.)
Why has the Food and Agriculture Organisation (FAO) changed the way it calculates the monthly FAO Food Price Index? But hold on, let us scrutinise first what the FAO Food Price Index is for 2013 October.
The FAO has said: “The FAO Food Price Index rose slightly in October, averaging 205.8 points. This was 2.7 points, or 1.3% above September, but still 11 points, or 5.3% below its October 2012 value. The slight increase was largely driven by a surge in sugar prices, although prices of the other commodity groups were also up.”
In substance, this sort of commentary for the FAO monthly food price index barely differs from the standard tedious template, in tone and tenor, that FAO has applied throughout 2013. The tone has been, as we begin to close 2013, that food prices have not moved very much through the year, and the tenor has been that food price volatility is being reined in.
Based on the evidence provided by real prices I experience in India – real markets (or bazaars or mandis) in which real vendors sell actual produce to real household buyers – I have no idea what the FAO Food Price Index is talking about. Nor do tens of millions of urban and rural households all over the world when they try and correlate the numbers of the FAO index to what they must confront every time they make a food purchase.
This is because of what the FAO Food Price Index measures which, I wearily point out, is a criticism levelled time and again. Why call it a food price index when it is in fact a food exporters’ and importers’ price indication?
Now, with a change in its calculations, the FAO index includes the following 23 commodities: wheat (10 price quotations monitored and reported by the International Grains Council), maize (1 quotation) and rice (16 quotations) for cereals; butter, whole milk powder, skimmed milk powder (2 quotations for each) and cheese (1 quotation) for the dairy group; poultry (13 quotations), pig (6 quotations), bovine (7 quotations) and ovine (1 quotation) for the meat dairy group; sugar (1 quotation); the oils group consists of one oil price quotation for soybean, sunflower, rapeseed, groundnut, cotton seed, copra, palm kernel, palm, linseed and castor. This construction, thus, includes the use of 73 price series.
The FAO has said: “The Index, which is a measure of the monthly change in international prices of five major food commodity groups (including 73 price quotations), has undergone some changes in the way it is calculated, although the new approach did not significantly alter the values in the series.” (See the Food Outlook released in 2013 November.)
Perhaps. We will not know for another few months. If a change was needed that made sense to consuming households, then FAO should have ensured the index reflected what households pay for the food the buy in the markets near their homes. If the FAO must serve multiple audiences, then it must devise food price indexes for these audiences separately (but the IGC already serves the food traders, and FAO’s own Agricultural Market Information System already serves the policymakers and the major international blocs).
In this late February capsule of the foodgrain forecasts from the International Grains Council (IGC) and the US Department of Agriculture’s WASDE (world agriculture supply and demand estimates) we see estimates for slightly higher production, but also somewhat lower consumption. The question is: what about stocks, on which there is never enough knowledge distributed as to who holds them (government or private, traders or bankers) and how they are used by food markets or agricultural commodities markets?
Still, here is what the IGC has said:
Following minor revisions to the 2012-13 forecasts, the estimate for total grains end-season stocks (excluding rice) has been revised up by 4mt to 326m, including increases for both wheat and maize. Overall, however, they remain down 40mt year-on-year at a six-year low, or a 17-year low for the major exporters.
IGC’s 2013 February grain market report presented the first forecast for the 2013-14 supply and demand balance for wheat. “While world output is tentatively projected up 4% year-on-year, much is expected to be absorbed by higher demand and end-season stocks are likely to rise by just 2mt, following a 21m decline in 2012-13. The forecast for 2012-13 end-season maize stocks has been revised 1.7mt higher this month, but major exporters’ end-season inventories are still put at a 16-year low,” said the 2013 February report.
Here are the major foodgrain forecasts for wheat, rice, coarse grain and maize:
According to the IGC – Major exporters’ stocks for 2012-13 are revised down by 1.5mt, to 49.9mt, but upward revisions for China and India raise the global total to 176mt, which is still down 21m from last year. Increases for Brazil, Iran and Russia help to lift the 2012-13 world trade forecast by 0.8mt this month, to 137.4m. World output for 2013-14 is tentatively projected up 4% year-on-year, but much is expected to be absorbed by higher demand leaving little room for stock building.
According to WASDE – Global wheat supplies for 2012-13 are nearly unchanged with a small increase in beginning stocks more than offsetting a small decrease in production. Global wheat output is projected 0.7 million tons lower. Production is lowered for Kazakhstan and Brazil, but raised for Ukraine, South Africa, and Belarus. Global wheat consumption is virtually unchanged at 673.4 million tons; however, global consumption is projected down 24.6 million tons year to year, mostly reflecting lower feed and residual use in 2012-13. World wheat ending stocks for 2012-13 are also nearly unchanged this month at 176.7 million tons.
According to the IGC – At 466mt, world rice production is forecast to be little changed year-on-year, as smaller harvests in Asia, particularly in India, are offset by gains elsewhere. World use is expected to rise by 2% year-on-year, to a fresh record, underpinned by increases in Asia’s leading consumers. Global ending stocks are forecast to fall marginally, but supplies in the major exporters are expected to rise to a new record. World trade in 2013 is projected to decline by 5% as key importers in Asia and Africa reduce purchases from last year’s highs.
According to WASDE – Global 2012-13 projections of rice production and consumption are raised from last month, but trade and ending stocks are lowered. Global 2012-13 rice production is forecast at a record 465.8 million due to increases for Bangladesh, Bolivia, and Nepal partially offset by reductions for Argentina and Laos. Global consumption is raised 0.7 million tons to a record 469.3 million as relatively small changes are made to several countries including Bolivia, Iraq, and Nepal. Global exports for 2012-13 are lowered slightly due mainly to reductions for Argentina and China. Imports are reduced for Bangladesh, Cuba, Egypt, and Indonesia. Global 2012-13 ending stocks are reduced 0.5 million tons to about102.0 million due mostly to decreases for Egypt and Indonesia.
According to WASDE – Global coarse grain supplies for 2012-13 are projected 2.1 million tons higher as a decrease in beginning stocks is more than offset by a 2.9-million-ton increase in production. Lower 2012-13 beginning stocks mostly reflect an increase in 2011-12 corn exports for Brazil and revisions to the Paraguay corn series that lower 2011-12 corn area and yield. Global 2012-13 production is also higher this month for sorghum, barley, oats, and rye. Sorghum production is raised 0.4 million tons for Mexico with higher area and yields for the summer crop, but lowered 0.2 million tons for Australia with reduced prospects for area and yields. Global barley, oats, and rye production are up a combined 0.6 million tons on larger reported crops for the FSU-12 countries.
According to the IGC – Global production is forecast to decline by 3% year-on-year, with sharp falls in the US and EU offsetting rises elsewhere, including in China and the southern hemisphere. Despite some less than ideal weather in recent months, Brazil and Argentina are still set to harvest record crops. Due to tighter supplies, world use is expected to dip by 1% year-on-year, led by reduced demand from the US ethanol sector. With total use again expected to exceed production, closing stocks will decline for a fourth consecutive year, including a sharp drop in the major exporters.
Can a cultivator tilling a five acre plot of land in Senegal use the FAO Food Price Index? Can a vegetable vendor on the streets of Jakarta, Indonesia, use the index? Can a corner shop in Quetta, Pakistan, follow the index? Can commodity traders in the world’s most active agricultural commodities and futures exchanges use the index? My answers to these questions are: no. no. no and yes.
Why should it be this way? It shouldn’t, especially since FAO also keeps track of consumer price indices in many countries. But let’s look at why it is this way.
Here is what the new update to the FAO Food Price Index has said, in two words, “remaining steady” (this is the 2013 February 07 update). I quote:
“The FAO Food Price Index averaged 210 in January 2013, unchanged from the slightly revised December value. Following three months of consecutive declines, the Index stabilised in January, as a rebound in oils/fats prices offset a decline for cereals and sugar. Dairy and meat values remained generally steady.”
Concerning cereals, the update said that the cereal sub-index averaged 247 in 2013 January, down nearly 3 points from 2012 December. Now here’s an odd sentence: “The values of the monthly index have been falling since October, mostly on improved crop conditions”. We’ve read news about drought conditions all over the place, in the USA, in Australia, in Central Asia and the former Soviet Union, about unseasonal conditions in South America, for well over three months, so this sentence makes little sense. The cereals explanation added: “Large exports of feed wheat have weighed negatively on maize quotations in spite of tight availabilities”.
Now, let’s see what the FAO Agricultural Market Information System (AMIS) has said in its 2013 February Market Monitor (pdf):
“Wheat production in 2012 fell to below the 2011 record. Early prospects for 2013 point to a larger crop in spite of a possible decline in the US production. Maize production fell well below 2011 in spite of upward adjustments to the estimates in China and North America – utilisation in 2012/13 exceeding 2011/12, contrary to earlier expectations, mostly on larger feed use in China, Russia and the US. Rice production prospects for 2012 little changed, with large declines in Brazil and India dampening world growth to less than 1% – utilisation in 2012/13 still anticipated to increase by 7 million tonnes.”
Here we have what sounds like two different FAO voices speaking – the Food Price Index voice, which sees broad stability, and the AMIS voice, which sees declining production and more utilisation (as the food economists like to call it). True, the Food Price Index reflects what has occurred in the last month, and is not a forecast, but, as we see below, it is based on quotations, and not what households and small vendors actually pay for food, and there lies the rub.
Because, the FAO Food Price Index consists of the average of five commodity group price indices weighted with the average export shares of each of the groups for 2002-2004. There are in total 55 commodity quotations “considered by FAO commodity specialists as representing the international prices of the food commodities”. For the cereals sub-index, it is compiled from the International Grains Council (IGC) wheat price index, itself an average of nine different wheat price quotations, and one maize export quotation; there are three rice components containing average prices of 16 rice quotations. Fascinating yes, but relevant to those in Senegal, Jakarta and Quetta who see 60% of their monthly income being used to buy food? I don’t think so.
“The FAO food price index is a trade weighted Laspeyres index of international quotations expressed in US dollar prices for 55 food commodities,” explained FAO’s 2009 ‘State of Agricultural Commodity Markets, High food prices and the food crisis – experiences and lessons learned’. You see why no local translation is possible for the many hundreds of millions under the food inflation hammer.
Why the international trade and export quotations numbers dominate is revealed, in a roundabout way, by a regular paragraph in the AMIS Market Monitor. The monthly pronouncement has this to say about investment flows (that is, money chasing foodgrain), for 2013 February: “Managed money was a significant seller of wheat, maize and soybeans as futures prices attained early January lows prior to USDA stocks report”. Pay attention to that term, ‘managed money’, which means funds run by banks and big investment agencies. “Managed money reversed its position in wheat from long (bullish) to short (bearish) but maintains long positions in maize and soybeans.” Now the confusion should clear somewhat. The index helps traders and exchanges deal better with volumes of grain (and dairy and meat and edible oil). AMIS helps them with a great deal more sophistication.
And what do the primary beneficiaries of the index have to say about the FAO Food Price Index being so benign at the start of 2013? “With corn and soybean prices down sharply from drought-driven record highs reached last summer and holding ‘significant’ risk for further declines, grain farmers should consider hedging their 2013 crops earlier than normal,” is an abstract from a report by the CME Group, a company that advises investors about all kinds of commodities, including agricultural. This tells us why the FAO Food Price Index cannot serve those struggling with soaring food bills in small town Asia and Africa.
It is looking like a good start to a year in which GM foods and GM crops can be further purged from our fields, shops and pantries. Through 2012 November and December, there were reports from the continents of Africa and South America that such crops and seeds were either being banned or that decisions concerning their use were being discussed, and pending those decisions the use of these crops and seeds would not be permitted.
Writing in The Guardian, John Vidal has barracked the UK government’s enthusiasm for GM and has said this enthusiasm (in Britain’s official, corporatised, retailed decision-making circles) is not matched in developing nations. Vidal has written: “Across the world, countries are turning their backs on GM crops; perhaps the coalition in the UK could learn something from them”.
What is remarkable, Vidal’s article has said, “is not that GM crops have, after 20 years and so much money spent, now reached 19 out of more than 150 developing countries, but that most nations have managed to keep out a rapacious industry, and that only a handful of GM food commodity crops like oilseed rape, soya and maize are still grown, mainly for animals and biofuels”. Well, yes and sadly a bit of ‘no’ too.
Although Vidal is right about the more rapacious elements of the GM/GE/DNA-manipulation industry (aren’t they all that way though?) may have been kept out of direct markets, the arguments about labelling and about monitoring (independently, which needs civic capacity, which is hardly there in the South, for instance in India) are taking place while food with GM material can be found on shop shelves. Cottonseed oil for example, which is pressed out of GM cotton, is said to be used as an alternative to other edible oils for cooking.
There’s no doubt left whatsoever that the role of genetically modified food in our food chain is a highly contested political issues. In a long, carefully argued and copiously referenced article, the Soil Association’s Peter Melchett dismantles the pro-GM lobby’s staking of the ‘scientific high-ground’. In the essay, intriguingly titled ‘The pro-GM lobby’s seven sins against science’, Melchett has said this lobby has been good at “simultaneously positioning itself as the voice of reason and progress, while painting its opponents as unsophisticated ‘anti-science’ luddites, whose arguments are full of dogma and emotion, but lack scientific rigour”.
Powerful forces in Western society have been promoting genetic engineering (now usually genetic modification – GM) in agricultural crops since the mid-1990s, Melchett has written. I would have added that these “powerful forces” are in no small measure aided and abetted by potentially more powerful forces in the countries of the South (like India) that are interested in the same – vast and detailed control over the cultivation of primary crop and the consumption of industrially processed and retailed food.
These forces, Melchett has written, “have included many governments, in particular those of the USA and UK, powerful individual politicians like George Bush and Tony Blair, scientific bodies like the UK’s Royal Society, research councils, successive UK Government chief scientists, many individual scientists, and companies selling GM products”. They have ignored the views of citizens, he has added, and most sales of GM food have relied on secrecy – denying consumers information on what they are buying. Very true. If there is ignorance to be found in the ‘western’ consumer (let us say the consumer in the western European OECD countries) concerning GM foods and GM crops, then the ignorance quotient is far higher in the consumers of let’s say the BRICS and ASEAN countries – which of course works to the advantage of the alliance of powerful forces.
Despite the efforts of the ag-biotech, industrial agriculture and processed and retailed food sector worldwide (with its dense financial and political inter-linkages), there are 20 states in the USA which are currently embroiled in fierce battles over GM labelling, strenuously opposed by the GM combine. GM cotton is widely grown in India and China, but GM foods are largely limited to the USA and South America. Brazil grows 29 million hectares of GM soy and maize, and Argentina slightly less, but Mexico has delayed the introduction of GM maize until this year, Peru has approved a 10-year moratorium on the import and cultivation of GM seeds, and Bolivia has committed to giving up growing all GM crops by 2015. In Central America Costa Rica is expected to reject an application from a Monsanto subsidiary to grow GM corn.
The UN Food and Agriculture Organisation’s (FAO) Agricultural Market Information System (AMIS for short, although whether it Francophonically proves to be an ‘ami’ of the cereal trader or the food consuming household we shall know in the months to come) has released its Market Monitor Number 3 which is for 2012 November.
Here, in a bland paragraph that tells us nothing about the travails of households budgeting for their evening bread, ‘roti‘, or rice, the AMIS Market Monitor has said: “World supply and demand situation continues to tighten for wheat and maize but rice and soybeans have eased.”
Here’s the rest of the snapshot paragraph: “In recent weeks, unfavourable weather conditions affecting some winter wheat growing areas in the northern hemisphere and maize and soybeans in the southern hemisphere have become a concern. In addition, contradictory reports about possible export restrictions by Ukraine also influenced the market.”
What I find useful is that the tables provided now include the USDA estimates and the IGC estimates. And moreover, in a generous display of collegial latitude (perhaps the AMIS has its good points after all) the Monitor has included the IGC index chart alongside the FAO index chart.
But as the World Food Programme (WFP) tirelessly warns, From Africa and Asia to Latin America and the Near East, there are 870 million people in the world who do not get enough food to lead a normal, active life (see the WFP’s hunger map here in English, en français, en español. What does that do to households who are not the primary audience of the AMIS?
This report from IRIN has said that now in Pakistan, more than half of households are food insecure, according to the last major national nutrition survey. The prices of staple grains like wheat and rice have been stable but are “significantly higher” than 2011, according to the World Food Programme’s (WFP) October 2012 Global Food Security Update. A 25% rise in fuel prices has also pushed up the price of food, as it becomes increasingly expensive to transport. WFP says rising food prices in international markets recently may also lead to price hikes in Pakistan. Clearly, we need to find a way to filter the AMIS outputs (or screen its inputs) so that the Monitors are more directly useful to houseolds and their struggle to find enough healthy food at affordable prices.
1. The Dawn of Pakistan has reported that “a global race for grain trading power is putting more of the world’s vital cereals in the hands of fewer companies, with a string of recent acquisitions raising fears that consumers will pay even more for their food, while farmers are squeezed”. The report said that Archer Daniels Midland last week bid for Australia’s last independent grain handler GrainCorp, the latest in a series of moves by grain trading heavyweights to grab a larger slice of a booming market as developing economies seek food security.
2. Nobel Prize winner Octavio Paz acutely observed that the invention of corn by the Mexicans is only comparable to the invention of fire by the early humans, according to this report from Voxxi. “From the inedible grass of the teocintle or teosinte, ancient Mexicans created modern corn, which was spread across Mesoamerica and eventually around the world.” The report said that the 60 or so breeds and the thousands of different varieties native to Mexico act as a genetic reservoir and a crucially important strategic good in terms of the global food supply and economy.
3. “Hunger and revolutions have always gone hand-in-hand, of course — the latter is what happens when you let them eat cake but the people have no bread,” explained this blog on Reuters. But at which point do prices pass the point of no return? Their research has found that food riots are most likely to occur when the FAO Food Price Index rises above 210. “Recognising the dangers of food speculation, six European banks – including Commerzbank, Germany’s second largest – this summer removed agricultural products from their commodity funds altogether. Wall Street, however, has not been so accommodating.”
4. Food security levels declined in 98 out of 105 countries between June and September because of rising food prices, according to updated data from the Economist Intelligence Unit and reported by Bloomberg Businessweek. The score for affordability of food dropped to 50.5 on a scale of 100 from 53.2 previously, an EIU researcher told the business magazine. Hungary, Brazil, Argentina and Russia had the biggest drops in affordability of food on a combination of economic weakness and inflation, the unit wrote. Global food prices have advanced 7.7 percent from June, according to the EIU. Among the most undernourished countries, the biggest drops in food affordability were recorded in South Africa, the Dominican Republic, Guatemala and Botswana, according to the report.
5. The countries with the highest burden of under-nutrition, responsible for as many as 2.6 million child deaths a year, are the most exposed to food price spikes, reported The Guardian. They tend to be net importers of food, and have citizens who spend 30-60% of their income on food. When prices go up, poor people take their children out of school and prioritise foods that provide energy over nutrition. A relatively short spike can have long-term effects on the development and potential of children.
6. In August 2012, three of the eight “livelihood zones” in Burundi – around 200,000 people – were found to be at a “crisis” level of food security, or Phase 3 in the Integrated Food Security Phase Classification scale, said this All Africa report. This was variously due to recurrent drought, plant disease, poverty, lack of drinking water and land scarcity. Most of the rest of the country is in Phase 2 – also classified as “stressed” – with a risk of falling into Phase 3 “at the slightest shock”, such as flooding or hailstorms, according to Isaac Nzitunga of the Ministry of Agriculture. More than 60 percent of the population in the tiny, densely populated central African state, one still recovering from a 1993-2005 civil war which killed some 300,000 people and uprooted more than a million others, is at risk of food insecurity. Some 58 percent of children are chronically malnourished, which means their physical and intellectual development is seriously threatened.
The Grain Market Report for 2012 October released a few days ago by the International Grains Council (IGC) makes two extremely important prognoses.
These two forecasts will have an immediate effect on grains prices as they are traded in the agricultural commodities markets through the winter season of 2012-13, and I expect we will see the effects in the major indices that describe the movements of food and of food prices – the FAO food price index, the World Bank ‘pink sheet’, the IMF commodity prices index, Unctad’s long-running series on agricultural commodities, and of course the various exchanges-based indices (DJ, CBOT, NYSE LIFFE and so on).
The IGC has cut a further 6 million tons (mt) from the 2012-13 forecast for total global grains production, which is now expected to be 5% lower year on year, at 1,761 mt. The decline includes 39 mt of wheat, 46 mt of maize, and 4 mt of barley. “Reduced availabilities and higher prices are expected to ration demand, resulting in the first year on year fall in grains consumption since 1998-99,” said the IGC in this month’s report.
It is worth making the connection that the United States Department of Agriculture (USDA) in its recent ‘Wheat Outlook’, released on 2012 October 15 by the Economic Research Service, had said that global wheat production in 2012-13 is projected to reach 653.0 million tons, down 5.7 million tons this month (that is, 2012 October). The USDA’s 2012 October Wheat Outlook had said the “largest change this month is a 3.0-million-ton cut in projected wheat production in Australia to 23.0 million” and had added that “projected wheat production in Russia continues its decline as the wheat harvest gets closer to its end and projections for abandoned wheat area get higher, reaching 12% of planted area”. About the European Union (EU-27) wheat production for 2012-13 the USDA Wheat Outlook had reduced it 0.8 million tons to 131.6 mt, mostly because of a significant reduction for the United Kingdom (UK) (down 0.8 million tons to 14.0 million).
The IGC forecasts show a further tightening in the balance this month, with 2012-13 end-season total grains stocks revised down by 4 mt to 328 mt (it was 372 mt the previous year), the lowest since 2007-08 – and we all remember well the global food price increases that set in during the 2007-08 season, and how the spikes of that period were quickly replaced from mid-2010 onwards by the sustained high plateau of food prices.
“Inventories for the major exporters will be even tighter and the smallest for 17 years,” the IGC has said in its 2012 October Report. The global year on year decline is forecast to come from a 24 mt reduction in wheat, an 18 mt decline in maize, and a 1 mt drop in other coarse grains, notably barley. Global grains trade is expected to fall by 19 mt from last year’s high, to 249 mt, with a particularly steep decline for wheat – down by 13 mt year on year, largely due to a forecast reduction in EU feed wheat imports against the backdrop of tight Black Sea supplies. (Also please see the European Commission’s directorate general of agriculture’s ‘Commodity Price Data’ 2012 August edition.)